Executive | 140624 | De Rotterdamse Chemische Industrie en Energy Efficiency? | Presentatie | René Peters

Recent developments with potentialimpact on the gas markets in Europe

Rene Peters

Director Gas Technology

TNO Energy

Overview

Future role of gas in the energy mix

Import dependency of gas and oil around the world

Potential impact of Shale Gas and Oil

Challenges for the EU energy supply and industry

Impact on the LNG markets and imports in Europe

Is Europe prepared for a Russian – Ukraine gas crisis

10 januari 2011M Bouman TNO Nieuwe huisstijl

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Let’s discuss some issues around gas…..

Oil & Gas Reserves:

Growth of world population and

prosperity

Environmental impact

Climate change and

health of living

Independency:

Security of supply and

geopolitics


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World Primary Energy Demand developmentthe role of gas in the energy mix

From: IEA special report on gas 2011


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Is there still enough gas around the world? World Proven Gas Reserves and replacement rate



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The world is increasingly producing unconventional gas World Natural Gas Production by source



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6


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•10 januari 2011•M Bouman

•TNO Nieuwe huisstijl

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Unconventional gas

Conventional gas

Unconventional oil

Conventional oil

mboe/d

5

10

15

20

25

1980 1990 2000 2010 2020 2030 2035

From IEA WEO 2012

Oil and Gas production in the USIEA projections



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US oil and gas prices

• Not coupled• Oil increasingly expensive• Gas cheaper below 4$

Low gas price drives: • Gas fuelled transport • Re-industrialisation• Investment in chemicals• Discussion on gas export

Economic crisis

EU SUPPLY PICTURE


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Development natural gas prices


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Cost of LNG transport

New resources of unconventional gas changes the energy landscape


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Latest EIA Estimates worldwidetechnically recoverable resources

Region 2013 EIA (tcf)

Europe 470 Poland, France

North America 1685 Canada, US, Mexico

Asia 1607 China, Australia

South America 1430 Argentina

Russia 415 FSU

Sub Saharan Africa 390 South Africa

MENA 1007 Algeria

World total 7201

From: EIA technical recoverable shale gas and oil reserves – June 2013

(1 tcf = 28 bcm)


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EIA Unconventional gas in Europa


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Latest EIA Estimates for Europetechnically recoverable reserves

Country 2013 EIA (tcf)

Poland 148

France 136

UK 26

Norway 0

Denmark 32

Germany 17

The Netherlands 26

Spain 8

Romania 51

Europe total 470 tcf = 13 tcm

From: EIA technical recoverable shale gas and oil reserves – June 2013

(1 tcf = 28 bcmTRR = technical recoverable reserve)

(1 tcf = 28 bcm)


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EU Shale gas resource estimates show large variations

There is a need for a more coherent workflow to estimate resources and more data from shale gas exploration wells

2011

2013


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Largest gas producing countries in 2035



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Change in Natural Gas Production by region



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UK and NL



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0%

20%

40%

60%

80%

100%

20% 40% 60% 80% 100%

Oil imports

Gas Imports

United States

ChinaIndia

European Union

Japan

2010

2035

20%Gas Exports

Net oil & gas import dependency in selected countries

From IEA WEO 2012

Development gas demand and supply in Europe

More import dependency (LNG/Pipeline)?

Russia / Norway/Algeria?Tight/Shale gas?


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Import dependency from Russia

Import of gas in Europe


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LNG import increasing

NEW LNG WAVE COMING?

OR: FID DOES NOT MEAN REALITY?


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A lot of new LNG capacity is built to supply to the USBut will never reach the US because of shale gas

Source: U.S. Energy Information Administration. The Washington Post. Published on February 7, 2013[1].

[1] http://www.washingtonpost.com/world/rise-of-cheap-us-coal-in-europe/2013/02/07/3ae56870-7189-11e2-8b8d-e0b59a1b8e2a_graphic.html

Don’t forget coal as power source, replacing gas

Gas Production in the Netherlands


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From TNO: www.nlog.nl

Gas earnings in the Netherlands


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From TNO: www.nlog.nl


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Dutch gas reserves are depleting the next decade(Future) Gas production profile NL

Groningen field

Small fields

Gas demand in NL

Export > < ImportFrom TNO: www.nlog.nl

Groningen looses its capacity as a swing producer for NL and Europe

Challenges in European gas supply

The gas demand is expected to be steady or growing (~550 bcm/yr)

Indigenous production is in decline (~50%)

NL (80 bcm/yr) and NO (110 bcm/yr) are not able to increase the gas

production

EU countries are not willing to invest in indigenous production from

unconventional resources in the next decade (except Poland, UK)

The LNG market is targeting for Asia / Japan with the highest market

price although import capability in West European countries is in place

Interconnection of pipeline networks in Europe is poor from North –

South direction and West to East.

Alternative pipeline routes from Iran, Azerbeijan are still to be developed

(TAP, Nabucco….)

So: rely on Russian gas?


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Key Messages

Gas will play an increasingly important role in the energy mix for decades

Gas will support the development of a clean energy supply via power

generation and transport (GTL, LNG, CNG), provided the CO2 price is high

and the gas/oil price ratio is low.

Europe will be increasingly dependent on gas import, also NL from 2025+

Europe should further focus on diversification of gas supply

Interconnections should enable a transparent gas market for Europe

LNG import facilities, pipeline connections and UGS provide viable

alternatives for Russian gas imports, however comes at a cost

Increase of indigenous gas production in Europe can be realised with

unconventional gas developments (tight gas and shale gas), but not

reduce import levels significantly.

A reduction in gas price will only be realised when a transparent global gas

market is realised which is decoupled from the oil market.


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Thank you for your time and attention

Contact details

Rene Peters

[email protected]

Phone +31 6 51551566

@renepeters

www.tno.nl/energy


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Business

Executive | 140624 | De Rotterdamse Chemische Industrie en Energy Efficiency? | Presentatie | René Peters